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WALL STREET TREADS WATER; FINANCIALS DROP AHEAD OF REPORTS

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US FINANCIAL MARKET
| US ECONOMY & POLITICS
 EUROPE & WORLD | TODAY IN HISTORY

DAILY MARKET REPORTS

  • With the S&P 500 up 14 percent in 2017, investors are betting on strong earnings growth across the S&P 500.
  • Kroger rose 3% after the grocery chain said it would explore a potential sale of its convenience stores business.
  • Wall Street banks JPMorgan Chase and Citigroup both report on Thursday.

US FINANCIAL MARKET

Delta Earnings Slip to $1.18 Billion

  • Airline hit by multiple weather disruptions and an outbreak of fare wars.
  • Of the three storms, Hurricane Irma had the most pronounced effect on Delta’s operations, resulting in 2,200 canceled flights at airports in Florida, the Caribbean and Delta’s hub in Atlanta.
  • Delta said profits dipped to $1.18 billion in the quarter from $1.26 billion a year earlier but forecast its keenly watched average passenger revenue would rise by 2% to 4% in the fourth quarter.
  • Despite the cancellations, Delta said its quarterly operating revenue rose 5.5 percent to $11.1 billion.

BlackRock closes in on $6 trillion in assets as index funds boom

  • BlackRock closed in on $6 trillion in assets under management as investors stormed into their index funds and the bull market in U.S. stocks raged on, it said on Wednesday.
  • The increase in assets under management to $5.98 trillion, along with strong investment performance pushed up revenues by 14 percent.
  • Third-quarter profits spiked to $947 million in the quarter from $875 million a year earlier.
  • Blackrock’s revenue of $3.2 billion was up 14% from a year ago.

Kroger backs outlook as it explores sale of its convenience stores

  • Kroger on Wednesday reaffirmed its 2017 financial forecast.
  • The company said it is exploring strategic alternatives for its convenience stores, including a potential sale.
  • Cincinnati, Ohio-based Kroger will invest $9 billion over three years in its “Restock” plan.
  • Kroger operates 784 convenience stores.

Amazon Welcomes Teens with New Parent-Controlled Shopping Allowance

  • When parents create an account, tied to payment methods of their choice, they can invite up to four teen users to create unique logins and download the Amazon shopping app to their own devices.
  • The teens get free rein to shop around—to a point. How much a teen is allowed to spend and what they buy can be, but doesn’t have to be, parent-regulated.
  • Every time their teen places an order, parents who opted in will receive an approval request via text or email (though not from the Amazon app).
  • The notification includes a description of the item, a picture and the total cost.
  • By replying to the request, parents have the ability to grant or reject the potential purchase.

Amazon offers a new way for students to get a Prime membership

  • Amazon announced a new $5.49 monthly payment option for Amazon Prime Student membership on Wednesday.
  • A full year of Amazon Prime Student retains its $49 price tag, which is still roughly half the price of a standard Prime account.
  • Prime Students also get access to special deals, or “coupons,” through their subscription.

Alibaba Sizes Up Facebook, Amazon With R&D Splurge

  • Alibaba says it will nearly triple spending on research and development, to more than $15 billion over the next three years.
  • As part of the spending initiative, Alibaba chief technology officer Jeff Zhang will lead a new research unit called the DAMO Academy—an acronym for discovery, adventure, momentum and outlook—that will establish research and development labs world-wide, including one in cooperation with the University of California, Berkeley.
  • The academy, which will also include advisers from universities including the Massachusetts Institute of Technology, Princeton University and Peking University, will fund research into areas such as data analytics, quantum computing, and machine learning.

GE’s Baker Hughes Recently Held Takeover Talks with Subsea 7 SA

  • Talks between the two companies recently broke down over price.
  • As of Tuesday, U.K.-based Subsea 7 had a market value of $5.4 billion.
  • The company is a construction-and-services contractor to the offshore energy industry.
  • Year to date, its stock price is up nearly 30%.

Taiwan Fair Trade Commission fines Qualcomm more than $700 million

  • Taiwan Fair Trade Commission said on Wednesday it will fine U.S. chipmaker Qualcomm T$23.4 billion ($774.14 million) for anti-trust violations of its chip technology.

Coach rebrands itself Tapestry as brand portfolio grows

  • Coach is now Tapestry.
  • Accessory company Coach has rebranded itself Tapestry.
  • The new name comes as it attempts to diversify itself through acquisitions of Kate Spade and Stuart Weitzman.
  • The name change will become effective October 31 of this year, at which point the company’s stock ticker symbol — now COH — will change to TPR.

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US ECONOMY & POLITIC

Job openings little changed in August, hold near record high

  • Employment continued to rise as hiring outpaced separations — which includes quits, layoffs and discharges.
  • A total of 63.8 million were hired over the past year, while separations totaled 61.7 million.
  • The previous report said job openings increased by 6.2 million in July, which was the highest level recorded since 2000.

Wildfires kill 17 in California wine country

  • Firefighters battling wildfires in California’s wine country face the prospect of new outbreaks when dry, windy conditions return on Wednesday.
  • At least 17 people have been killed and 2,000 homes and businesses destroyed in blazes.
  • Gusts of up to 50 mph (80 kph) and 10 percent humidity are forecast for later on Wednesday and into Thursday.

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EUROPE & WORLD

Japan’s Nikkei Closes at Two-Decade High

  • Nikkei rose 57.76 points to close at 20881.27, the highest close since Dec. 5, 1996.
  • Some money managers say they believe Japan is finally ready to break out of a rut that is more than a quarter-century old.
  • In the current rally, as in previous cases, Japan is lagging global peers such as the U.S., where stock prices have already set records this year.
  • Pretax profits at Japanese companies, excluding financial firms, increased 23% from a year earlier to a record ¥22 trillion ($196 billion) in the April-June quarter.
  • Companies are taking shareholder-friendly moves such as bringing in more independent directors and buying back shares.

IMF Raises Global Economic Outlook for This Year and 2018

  • The IMF raised its forecast for growth to 3.6% this year and 3.7% next year, an acceleration from the 3.2% growth recorded in 2016.
  • That is up 0.1 percentage point in each year from the most recent round of forecasts, released in July.
  • This year will likely be the strongest since 2014, with most of the world’s major economies strengthening.

IMF Identifies Nine Big Banks Likely to Struggle with Profitability

  • IMF said some of the world’s largest financial institutions—including Deutsche Bank, Citigroup, Barclays, and a few Japanese institutions—could struggle in coming years to remain sufficiently profitable.
  • It is an unusual step for a body like the IMF to identify banks by name. The report named nine financial institutions in all.

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TODAY in HISTORY

  • The Boer War began in South Africa. (1899)
  • A letter from Albert Einstein was delivered to President Franklin D. Roosevelt concerning the possibility of atomic weapons. (1939)
  • The first staffed Apollo mission, Apollo 7, was launched with astronauts Wally Schirra, Donn Fulton Eisele, and R. Walter Cunningham aboard. (1968)
  • Space shuttle Challenger astronaut, Kathryn Sullivan, became the first American woman to walk in space. (1984)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, Wall Street Journal.

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